Earlier this year, in an attempt to bring in new customers I created three offers: Buy One Get One Free, 50% Off and Free 0.9 oz Samples.
And they worked. Boy did they work.
Between January and June 2023 those promotions brought in 8,422 new customers.
For perspective we’ve served about 51,000 customers over the eight years we’ve been in business. So in a span of 6 months we brought in more than 16% of our entire brand database.
And this would be great news, except it nearly broke us – profit and production wise.
If you ordered in that time frame you know it was chaotic. Orders took weeks to ship out. Customer service was backed up even longer. For the first time in my life I found myself regularly having heated back and forths with angry customers.
Deep down I knew it was wrong — dead wrong — to get defensive with people who were spending money with me. But, under constant exhaustion, the martyr in me jumped out. I kept thinking “I’m shaving half the price off my products *for you* and you’re complaining??” Lol. That’s a terrible starting point for customer service!
We were rushing packages out so quickly that I didn’t notice our shipping labels were being compromised. As the cold packs inside our insulated packages melted, the condensation created moisture on the outside of the bag that was rubbing the ink off our labels. So, on top of the existing chaos, USPS was returning packages to us by the dozen, whose labels they couldn’t read. Confused customers assumed we were purposely issuing tracking numbers without actually shipping out packages. The one-star Google reviews rolled in.
In March I suffered a catastrophic limb spasm that sent me to urgent care. As I writhed in pain the nurse stared at my charts, then back at me, as though to say, “What the HELL have you been doing that this happened?!”
I remember laying in bed at night thinking, “Is this what success is supposed to feel like?? Because it feels pretty terrible…”
And it wasn’t even true success! It was doing major financial damage because small businesses like mine *cannot* play the low price/high volume game.
Between hiring more staff to help churn out product, paying tens of thousands for the materials and packaging of the free samples, and losing money on products that went underwater, profit wise, once they hit 50% off or more, we were hemorrhaging funds.
And so, after six months of madness, I pulled the plug.
I had no plan or strategy. I just knew the chaos had to end. On June 28, 2023, a few days after my 38th birthday, I started removing all of the money-losing promotions from our website and marketing. Free Samples, 50% Off and Buy One Get One Free were the first to go.
Then came the individual 0.9 oz and 2.5 oz sizes, after an audit revealed there was no financially feasible way to ship them insulated without losing money. (Insulated shipping costs about $15 per package for us to do, regardless of size. There was no way on earth we were convincing anyone to pay $15 of shipping for a $7 or $19 product, so we removed individual small sizes altogether and bundled them into sample packs.)
What happened next? Well, a whole lot of silence. And the need to face some really really tough questions. (Click here to read Part 2.)